SEBI's Timely Directive Amidst Market Fluctuations

In the past week, Mid-Cap and Small-Cap dedicated funds have experienced underperformance compared to Large-Cap funds, marking a notable shift after a prolonged period. In the last one-year, broader indices-based funds have hugely outperformed large-cap funds. One contributing factor to this volatility is a recent directive issued by the Securities and Exchange Board of India (SEBI), aimed at conducting thorough assessments of small-cap and mid-cap fund portfolios. The directive mandates an evaluation of liquidity, volatility, and alignment with benchmarks, among other key metrics.